Property

Expanded Definition

More broadly construed, property can refer to anything tangible or intangible that could have an owner. Not all property is owned, but all owners have property.

Property rights -- that is, legally defining the owners of property and defending their rights to their property -- may be the most critical sine qua non of capitalism. Property rights are fairly standard in the developed world, and an important reason why the developed world has developed. On the other hand, much of the so-called developing world does not yet have clearly define and defend ownership of property.

As economist Hernando de Soto wrote in his book The Mystery of Capital, property rights enable owners to borrow against the value of their property. This creation of capital (financing) is what enables citizens to grow their economies. Without property rights, citizens are unable to establish the value of what they own, and borrow further against it to grow it. It is this dynamic, de Soto contends, that has largely kept the world divided between the haves and the have-nots.